Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (March 2017)
26 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, Mar 3, 2017
Slide 1: Focused on Energy Delivery, Positioned to Execute
Focused on Energy Delivery, Positioned to Execute Introduction to CenterPoint Energy March 2017 A Fortune 500 company included in the: S&P 500 Index S&P 500 Utility Index Dow Jones Utility Average Index PHLX Utility Sector Index Russell 1000 Index Exhibit 99.1
Slide 2: Cautionary Statement
Cautionary Statement This presentation and the oral statements made in connection herewith contain statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings, growth, costs, prospects, capital investments or performa
Slide 3: Agenda
Agenda Overview Review of Business Segments Electric Transmission and Distribution Natural Gas Distribution Energy Services Midstream Investments Earnings Guidance Appendix
Slide 4: Regulated Electric and Natural Gas Utility Serving more than 5.8 Million Customers
CenterPoint Energy, Inc. (NYSE: CNP) Regulated Electric and Natural Gas Utility Serving more than 5.8 Million Customers Electric Transmission & Distribution: Electric utility operations with ~2.4 million metered customers across ~5,000 square miles in and around Houston, Texas 19th largest U.S. inve
Slide 5: Operating Energy Delivery Businesses that Provide Superior Performance for our Key Stakeholders
Operating Energy Delivery Businesses that Provide Superior Performance for our Key Stakeholders Our Vision: Lead the nation in delivering energy, service and value We are a premier U.S. energy delivery company Delivering energy is CenterPoint Energy’s core business Delivering service and value appli
Slide 6: CenterPoint Energy's Value Proposition
CenterPoint Energy’s Value Proposition Focused on delivering long-term value for all stakeholders Strong operating cash flow and balance sheet Solid historical dividend growth expected to continue Future capital investment in transmission and distribution assets is expected to sustain earnings momen
Slide 7: Improving Customer Satisfaction while Reducing Carbon Emissions
Improving Customer Satisfaction while Reducing Carbon Emissions Electric T&D Utility Technology Absence of generation assets reduces CenterPoint’s carbon footprint compared to integrated utilities One of the first large scale Smart Meter deployments in the U.S. Deployed an Advanced Distribution Mana
Slide 8: 2016 Highlights
Utility Operations Strong customer growth – over 90,000 new utility customers Total electric throughput up over 3% compared to 2015 Capital expenditures of ~$1.4 billion invested on behalf of our customers and total rate base growth of 5.4% Increased rate relief by $95 million Earned ROEs near autho
Slide 9: Electric Transmission and Distribution – Overview
Electric Transmission and Distribution – Overview ~2.4 million metered customers; ~5,000 square miles in and around Houston, Texas Consistent residential customer growth of ~2% Nov. 2016 average residential electric price in TX: $0.111/kwh (1) Has consistently earned at or near its 10% authorized RO
Slide 10: Electric Transmission and Distribution Capital Investment Outlook
2016A 2017E 2018E 2019E 2020E 2021E Transmission 48% 50% 45% 47% 40% 31% Distribution 49% 46% 50% 49% 56% 64% Electric Transmission and Distribution Capital Investment Outlook $4.1 Billion 2017 – 2021 Capital Plan (1) Includes AFUDC (2) Capital expenditures related to the Brazos Valley Connection in
Slide 11: Gas Operations – Overview
Gas Operations – Overview Natural Gas Distribution Six state footprint with vibrant metropolitan areas of Houston and Minneapolis ~3.4 million customers ~1% annual customer growth since 2010 Earning near allowed returns; aggregate allowed ROE: 9.81% Capital recovery mechanisms that reduce regulatory
Slide 12: Natural Gas Distribution Capital Investment Outlook
Capital Recovery Method 2016A 2017E 2018E 2019E 2020E 2021E Annual Mechanisms 27% 57% 63% 57% 63% 63% Rate Cases 73% 43% 37% 43% 37% 37% Natural Gas Distribution Capital Investment Outlook $2.7 Billion 2017 – 2021 Capital Plan (1) Includes AFUDC (1)
Slide 13: CenterPoint Energy Services (CES) Overview
CenterPoint Energy Services (CES) Overview Competitive natural gas supply and related energy services Non-regulated operations Complementary to natural gas utilities ~33,000 commercial and industrial customers across 33 states Low value-at-risk business model – storage and transportation capacity ma
Slide 14: Energy Services 2017 Outlook
Energy Services 2017 Outlook Energy Services projected to contribute $45 – $55 million in operating income Acquisition of Continuum’s retail energy services business expected to be accretive to earnings Recent AEM acquisition expected to be modestly accretive to earnings Customer count does not incl
Slide 15: Enable Midstream Partners, LP Ownership Structure
Enable Midstream Partners, LP Ownership Structure Note: As of December 31, 2016 (1) Percentage of common and subordinated units Public Unitholders Transportation and Storage Gathering and Processing GP Interest 50% management interest 40% economic interest LP Interest 54.1% of common and subordinate
Slide 16: Highlights from Enable Midstream's Earnings Call on Feb. 21, 2017
Highlights from Enable Midstream’s Earnings Call on Feb. 21, 2017 #1 in Processing Capacity Enable is well-positioned to benefit from operational leverage associated with leading processing capacity investments Recent Commercial Success Benefits Increase Fee-based Margin P Reduce Commodity Exposure
Slide 17: Midstream Investments Ownership Review Update
Midstream Investments Ownership Review Update Criteria for Consideration of a Sale or Spin – sustainable value for our long-term shareholders Comparable earnings per share and dividends Improve visibility of future earnings Seek to maintain current credit ratings Ongoing Activities Evaluating OGE’s
Slide 18: 2016 Guidance-Basis EPS Growth in Excess of 5% with Higher Growth Projected for 2017
2016 Guidance-Basis EPS Growth in Excess of 5% with Higher Growth Projected for 2017 (2) 2016 EPS 2015 - 2016 EPS on a Guidance (Non-GAAP) Basis + 2017 Guidance We anticipate 2017 EPS growth will be driven by: (1) As provided on Enable’s 4th quarter 2016 earnings call (2) Refer to slide 24 for recon
Slide 19: Additional Reference Materials
Additional Reference Materials Category Reference Material Link Financial Information Quarterly Results http://investors.centerpointenergy.com/results.cfm Debt & Maturity Schedules Regulatory Information State Commission Website Access Points http://investors.centerpointenergy.com/regulatory-info.cf
Slide 20: Appendix
Appendix
Slide 21: Regulatory Mechanisms
Regulatory Mechanisms Electric Transmission and Distribution Distribution Cost Recovery Factor (DCRF) – filed annually Transmission Cost of Service (TCOS) – eligible to file 2 times per year Natural Gas Distribution Gas Reliability Infrastructure Program (GRIP) for capital cost recovery in Texas For
Slide 22: Liquidity and Capital Resources
2016 Adjusted FFO/Total Debt – 24% (1) Equity / Total Capital – 36% (1) Interest expense savings of $14 million with over $600 million of 6% plus debt retired in 2016 (1) 2017 Planned capital investment of approximately $1.5 billion Net incremental borrowings anticipated of $200 - $500 million; depe
Slide 23: CenterPoint's Current Tax Position
CenterPoint’s Current Tax Position Effective Tax Rates CenterPoint’s 2016 Effective Tax Rate was 37% (projected rate of 36% plus the income tax expense recognized due to the Louisiana state tax law change) Cash Tax Rates CenterPoint’s 2016 cash tax rate was approximately 4% All remaining federal tax
Slide 24: Reconciliation: Net Income (Loss) and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS
Note: Refer to slide 2 for information on non-GAAP measures Reconciliation: Net Income (Loss) and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance
Slide 25: Adjusted Funds From Operations (FFO)
Adjusted Funds From Operations (FFO) ($ in millions) Year Ended December 31, 2016 Year Ended December 31, 2015 Amounts included in Cash Flows from Operating Activities: Net income (loss) $ 432 $ (692) Depreciation and amortization 1,126 970 Amortization of deferred financing costs 26 27 Deferred inc
Slide 26: Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds
Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds ($ in millions) December 31, 2016 December 31, 2015 Short-term Debt: Short-term borrowings $ 35 $ 40 Current portion of transition and system restoration bonds* 411 391 Indexed debt (ZENS)** 114 145 Current portion of
Centerpoint Energy — Investor Presentation (March 2017) on 6ix